economic forecast – Page 4 – Author Carlo Carrasco

IMF sees stronger economic growth for the Philippines in 2026 but warns about risks related to external developments

January 28, 2025January 25, 2025carlocarrasco

Recently the International Monetary Fund (IMF) stated that it expects the economic growth of the Philippines to get stronger in 2026 but it issue a warning that external developments could prevent it from happening, according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the news report of BusinessWorld Some parts in boldface…

THE PHILIPPINE ECONOMY will continue to accelerate from this year to 2026 as domestic demand remains robust, the International Monetary Fund (IMF) said, but warned risks are tilted to the downside due to possible external shocks.

At the same time, Finance Secretary Ralph G. Recto said that the Philippines likely failed to hit its 6-6.5% growth goal for 2024, amid typhoons.

“If it hits 6% in the fourth quarter, I’ll be happy with that. I don’t think it will hit 6% for 2024, but I think it will surpass 6% in 2025,” Mr. Recto told reporters on Jan. 16.

For the first nine months of 2024, Philippine growth averaged 5.8%, the same as the IMF’s projection for the full year. Preliminary fourth-quarter and full-year gross domestic product (GDP) data will be released on Jan. 30.

In its latest World Economic Outlook update, the IMF kept its GDP forecasts for the Philippines at 6.1% this year and 6.3% for 2026, the same as its projections in October.

These would fall within the government’s 6-8% GDP target for 2025 and 2026.

“Growth for 2025-2026 is projected to be primarily driven by domestic demand, namely consumption and investment,” an IMF spokesperson said in an e-mail.

“Consumption growth will be supported by lower food prices and gradual monetary policy easing,” it added.

Latest data from the Philippine Statistics Authority showed household consumption, which accounts for over three-fourths of the economy, jumped by 5.1% in the third quarter from 4.7% a quarter ago.

“Investment growth is expected to pick up on the back of a sustained public investment push, gradually declining borrowing costs and acceleration in the implementation of public-private partnership projects and foreign direct investments (FDI), following recent legislative reforms,” the IMF said.

Gross capital formation, the investment component of the economy, expanded by 13.1% in the third quarter, a turnaround from the 0.3% dip a year ago.

However, the IMF said that the balance of risks to the growth outlook is tilted to the downside, citing external risks.

“Some of the main downside risks include recurrent commodity price volatility, and new supply shocks, which may necessitate tighter monetary policy to anchor inflation expectations,” it said.

The IMF also cited shocks such as geopolitical tensions which could disrupt trade and other financial flows.

“Higher for longer policy rates in advanced economies (could cause) capital outflows, and tighter financial conditions,” it added.

The multilateral institution also cited climate shocks and extreme weather events which would lead to economic losses.

“There are also upside risks to the outlook, including from higher-than-expected growth in private investment through public-private partnerships, higher inward FDI following a faster-than-expected global recovery, or stronger reform momentum,” it added.

INFLATION – Meanwhile, the IMF said it expects inflation to remain within the central bank’s 2-4% target range in the near to medium term. It projects headline inflation to average 2.8% this year and 3% in 2026.

“However, risks are tilted to the upside, as rising geopolitical tensions, extreme climate events, and recurrent commodity price volatility continue to pose upside risks to inflation,” it said.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the IMF is correct with its current analysis of the details and economic forecast for the Philippines? Do you think the national government should focus more on attracting new foreign investors and bringing inflation down to build up the economic momentum?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

Citigroup sees Philippine economy expanding by about 6% this year

January 28, 2025January 21, 2025carlocarrasco

In the perspective of Citigroup, Inc. (Citi), the economy of the Philippines will grow this year by around 6%, pointing to the growth of the business process outsourcing (BPO), according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the news report of BusinessWorld Some parts in boldface…

CITIGROUP, INC. (Citi) expects the Philippine economy to expand by around 6% this year, partly driven by sustained growth in the business process outsourcing (BPO) sector.

“We expect the growth in 2025 to stay within the 6% handle,” Citi Asia South Head Amol Gupte said in an online briefing on Monday.

Citi’s forecast would be at the low end of the government’s 6-8% target for the year.

“The Philippines will continue to benefit from [the BPO industry] and will create a lot of jobs. On moving up the value chain on global capability centers, countries like the Philippines will play a very large role along with India,” Mr. Gupte said.

The information technology and business process management (IT-BPM) industry ended 2024 with $38 billion in export revenue, and 1.82 million full-time employees.

Under the Philippine IT-BPM Industry Roadmap, the target is to grow into a $59-billion industry and increase the full-time employee count to 2.5 million by 2028.

“So, I think it’s really important that the Philippines, as it thinks about the BPO industry, moves up the value chain so that it retains and bring more middle-office kinds of jobs beyond the voice jobs that exist in the tens of thousands,” Mr. Gupte said.

However, the rise of artificial intelligence (AI) could be a risk to the IT-BPM sector in the Philippines.

“There’s also the risk to that in terms of what AI will do to that industry and whether that will reduce jobs,” Mr. Gupte said.

Meanwhile, Citi South Asia Corporate Banking Head K Balasubramanian said sustained economic growth ensures that Philippine banks are well-positioned to continue to generate profits.

“I think the financial profile of the Filipino banks continues to be very strong, and with 6% growth I think they are well capitalized to look at the opportunities ahead,” he said.

As of end-September 2023, the Philippine banking system’s net profit rose by 6.4% to P290 billion as both net interest and non-interest income grew.

“We just saw the upgraded Philippine sovereign rating that happened in the fourth quarter of last year. And if you look at the impact of that on the Republic of Philippines, as well as the state-owned banks of the Philippines, I think that’s going to be crucially positive because we are now up to BBB+,” Mr. Balasubramanian said.

“(This) means that the ability to access international financing is going to be better and even the cost of the access is going to be better than what it was in the past.”

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think Citgroup is correct about its research on the Philippine economy? Do you think the BPO industry will contribute a lot to the economic growth of the nation this year?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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DBCC adjusts Philippines GDP growth targets for 2024 to 2028

December 11, 2024December 3, 2024carlocarrasco

Recently the Development Budget Coordination Committee (DBCC) adjusted its economic growth targets for the Philippines covering the next few years in relation to varied factors, according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…

THE Development Budget Coordination Committee (DBCC) on Monday trimmed the economic growth target for this year to a range of 6-6.5% but widened the target band to 6-8% for 2025 until 2028, due to “evolving domestic and global uncertainties.”

Budget Secretary Amenah F. Pangandaman, who chairs the DBCC, said Philippine gross domestic product (GDP) is now projected to grow by 6-6.5% this year, narrower than the previous 6-7% goal.

“Despite domestic challenges, we are optimistic that we can still attain our growth target for the year of 6% to 6.5%. In particular, we expect the Philippine economy to bounce back during the last quarter, given the anticipated increase in holiday spending, continued disaster recovery efforts, low inflation, and a robust labor market,” she said at a briefing after a DBCC meeting on Monday afternoon.

The DBCC’s review of the macroeconomic assumptions came after the Philippine economy expanded by a weaker-than-expected 5.2% in the third quarter, which was the slowest since the 4.3% logged in the second quarter of 2023.

In the first nine months, GDP growth averaged 5.8%. To meet the lower end of the government’s revised 6-6.5% target band, the economy would need to grow by 6.5% in the fourth quarter.

Finance Secretary Ralph G. Recto said the Philippine economy can still “realistically” grow by 6% for the full year.

“The growth assumptions for 2025 to 2028 have been given a wider band of 6% to 8%, reflecting the anticipated impact of structural reforms and evolving domestic and global uncertainties,” Ms. Pangandaman said.

To achieve the targets, she said the government is committed to “accelerating infrastructure investments, enhancing the ease of doing business, and boosting national competitiveness.”

The DBCC chair said they expect the recently signed Republic Act No. 12066 or Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act to spur faster growth and attract more foreign investments.

FISCAL program – “We have maintained our medium-term fiscal targets for 2025 to 2028. This means that we remain determined to reduce the country’s deficit in a more gradual and realistic manner, while also bolstering long-term investments that create more jobs, increase incomes, and decrease poverty incidence,” Ms. Pangandaman said.

The DBCC said it raised the deficit ceiling for 2024 to -5.7% of GDP from -5.6% previously. It kept the deficit ceiling at -5.3% of GDP for 2025, -4.7% for 2026, -4.1% for 2027 and -3.7% for 2028.

For this year, the DBCC raised the revenue outlook to P4.383 trillion in 2024 from P4.27 trillion previously. Revenue targets were kept at P4.644 trillion for 2025, P5.063 trillion for 2026, P5.627 trillion for 2027, and P6.249 trillion for 2028.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the DBCC is correct with its GDP projections for the Philippines for the next few years?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Economy of the Philippines to keep growing above 6% in 2024 and 2025

November 1, 2024October 24, 2024carlocarrasco

Recently, an economist predicted that the economy of the Philippines will keep growing above 6% this year and next year, according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Philippine economy is expected to remain one of the fastest growing economies in the region, with growth likely settling at above 6 percent for 2024 and 2025.

In his economic and market outlook released on Tuesday, BPI senior vice president and lead economist Emilio Neri Jr. said economic growth will likely hit 6.1 percent this year and further accelerate to 6.3 percent in 2025.

“The Philippine economy has been resilient despite significant headwinds like severe El Niño and devastating typhoons, still managing to grow by 6% in the first half of 2024,” Neri said.

“Looking ahead, the Philippine economy will likely continue to outperform in the region, supported by its strong consumer base,” he added.

Neri expects headline inflation to ease to 3.2 percent in 2024 and further decelerate to 2.8 percent in 2025.

“Inflation is expected to be more manageable in the coming year given the improving prospects of food supply. With El Niño now behind us and the potential increase in production, along with tariff reductions, rice may become more affordable,” he said.

Neri said lower inflation may help boost consumption in the coming year, while election-related spending could also further stimulate economic activity.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines has enough momentum to exceed the growth forecasts of the economists for 2024 and beyond? Do you think the Philippines can do a better job on attracting more foreign investors soon?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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World Bank (WB) sees strong Philippine economic growth in 2024 and 2025

October 22, 2024October 11, 2024carlocarrasco

By citing positive factors in its latest report, the World Bank (WB) raised its Philippine economic growth forecasts for 2024 and 2025, according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the BusinessWorld report. Some parts in boldface…

THE World Bank (WB) has raised its economic growth forecasts for the Philippines for this year and in 2025, driven by improved service exports and public investments.

But weak consumption and investment will keep the country’s growth below pre-pandemic levels, it said.

In its East Asia and Pacific Economic Update, the Washington-based multilateral lender now expects the Philippine economy to grow by 6% this year from 5.8%.

The Philippines could become the second-fastest growing economy in Southeast Asia, behind Vietnam (6.1%) and ahead of Cambodia (5.3%), Indonesia (5%), Malaysia (4.9%), Laos (4.1%), Timor-Leste (3%), Thailand (2.4%) and Myanmar (1%).

“Among the larger countries, only Indonesia is expected to grow in 2024 and 2025 above pre-pandemic levels, while growth in Malaysia, the Philippines, Thailand and Vietnam is expected to be below those levels,” the World Bank said.

For 2025, it forecasts Philippine economic output to expand by 6.1% from 5.9% in its April forecast.

The lender’s growth forecasts for the Philippines are at the low end of the government’s target of 6-7% for 2024 and below the 6.5-7.5% goal for next year.

The Philippine economy grew by 6.3% in the second quarter, faster than 5.8% in the previous quarter and 4.3% a year ago. In the first half, growth averaged 6%.

The World Bank said service exports and public investment have supported Philippine economic growth, but consumption and private investment remain weak.

From 2024 to 2026, the lender expects the Philippine economy to grow by an average of 6%, it said in a separate report.

This will be supported by remittances, jobs, slower inflation and external demand. However, weaker growth in China, global economic slowdown and weather disruptions are risks to the outlook.

It also projects the government’s budget deficit to fall to 4.6% of gross domestic product (GDP) by 2026 due to improved state spending. This is slightly below the 4.73% target for the year.

Better revenue collection will be supported by key tax measures, improved tax administration and higher dividends from state-owned corporations, the World Bank said.

The lender also raised this year’s growth forecast for the East Asia-Pacific region to 4.8% from 4.5% in April.

“Most East Asia-Pacific economies are expected to experience robust growth in 2024, supported by private consumption and a positive external environment,” according to the report. In 2025, the region is expected to grow by 4.4% from its previous forecast of 4.3%.

However, domestic demand is expected to moderate in the Philippines, Indonesia and Thailand, while private investment growth remains weak across the region.

“Investment growth has been declining across most countries in the region over the past two decades, with particularly sharp drops in China, Indonesia, Malaysia, and more recently, the Philippines.”

It also noted that the Philippines and Malaysia have kept a conservative fiscal stance due to their higher structural deficit this year.

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the Philippines has enough momentum to exceed the WB’s economic growth forecasts for 2024 and 2025?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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US Dollar reserves of the Philippines reach all-time high of almost $112 billion

October 15, 2024October 8, 2024carlocarrasco

Based on the preliminary data of the Bangko Sentral ng Pilipinas (BSP), the American Dollar reserves of the Philippines reached $111.981 billion (as of September 2024 specifically) which counts as a new all-time high, according to a Manila Bulletin business news report.

To put things in perspective, posted below is an excerpt from Manila Bulletin report. Some parts in boldface…

The country’s US dollar stock climbed to its highest level of $111.981 billion as of end-September 2024, surpassing the previous record of $108.794 billion in 2021, as the central bank was accumulating foreign exchange and assets to boost external reserves and defend the local currency.

Based on preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Monday, Oct. 7, the gross international reserves (GIR) increased by 14.13 percent or by $13.865 billion year-on-year compared to $98.116 billion same time in 2023.

The GIR also rose by 3.82 percent or by $4.125 billion versus end-August this year’s reserves of $107.857 billion.

The BSP-monitored GIR are foreign assets of the BSP invested in foreign-issued securities, monetary gold, and foreign exchange.

The latest GIR level is “more than adequate external liquidity buffer” that is equivalent to 8.1 months’ worth of imports of goods and payments of services and primary income. It is also about 6.3 times the country’s short-term external debt based on original maturity and 4.4 times based on residual maturity, said the BSP.

Basically, a GIR is adequate if it can finance at least three-months’ worth of the country’s imports of goods and payments of services and primary income. This was based on international standards. The GIR is also viewed as more than sufficient if it provides at least 100 percent cover for the payment of the country’s foreign liabilities, public and private, falling due within the immediate 12-month period.

The reserves were higher in end-September because of the government’s net foreign currency deposits with the BSP that includes proceeds from the issuance of ROP Global Bonds.

The GIR likewise got a boost from the BSP’s gold holdings which had a higher value with the increase in the prices of gold in the global market. The BSP’s net income also increased due to its investments overseas.

Let me end this post by asking you readers: What is your reaction to this recent development? What is the first thing that comes to your mind when the Philippines’ US Dollar reserves grow? Does this development make you feel comfortable when it comes to banking, investing or running a local business? Are you satisfied with the way the BSP has been moving with regards to financial and economy activities?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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IMF sees Philippine economy growing by more than 6% in 2025

October 11, 2024October 3, 2024carlocarrasco

Citing key factors in its research, the International Monetary Fund (IMF) predicts that the economy of the Philippines will expand by more than 6% in 2025, according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Philippine economy successfully navigated multiple external headwinds in recent years and is expected to grow by over 6 percent next year, an International Monetary Fund (IMF) official said.

In a briefing at the Bangko Sentral ng Pilipinas office in Manila on Wednesday, IMF Mission Chief Eli Arbatli Saxegaard said the Philippines remained among the best performing economies in the region.

An IMF team led by Saxegaard held meetings in Manila from Sept. 18 to Oct. 2 to conduct discussions on the Philippine economy for the 2024 Article IV Consultation.

Saxegaard said the Philippine economy is projected to grow by 5.8 percent this year and will further accelerate to 6.1 percent in 2025.

“This pick-up in growth will be supported by more accommodative financial conditions and higher investment,” she said.

The latest projection, however, was lower than the 6 percent and 6.2 percent previous forecast for 2024 and 2025.

“The downward revision from our July forecast reflects our view that private consumption is going to grow slightly with less momentum. So I would like to highlight that the downgrade is very small, 0.2, and reflects the fact that the first half (of the year) private consumption growth was lower than what we had anticipated. And this might be in part driven by the high food prices,” Saxegaard said.

Despite the revision, Saxegaard said the Philippines continues to be one of the highest growing economies in the region.

“I would also like to highlight that the growth forecast for the Philippines remains one of the highest in the region. It’s 6.1 percent growth for 2025, is a very respectable growth rate… So it’s a very small adjustment reflecting the outturns the first half,” she said.

Downside risks to the country’s growth outlook include a slowdown in major economies that could disrupt trade and financial flows; commodity price volatility and supply shocks; and an escalation of geopolitical tensions or regional conflicts.

Easing of global financial conditions, or faster than anticipated private investment linked to public-private-partnerships and larger foreign direct investment inflows, on the other hand, could stimulate higher growth.

The IMF believes that the Philippine economy holds significant potential with its abundant natural resources, untapped blue economy, and a sizable demographic dividend.

Saxegaard, however, said that unlocking the medium-term growth potential will depend on structural reforms and strengthened social protection programs.

She said priority areas include upgrading infrastructure, making significant investments in healthcare and education, addressing land fragmentation and low productivity in agricultural sector, and enhancing governance.

Inflation, meanwhile, is projected to settle within the government’s target for both 2024 and 2025.

“We believe that the decisive monetary tightening and other measures have helped mitigate inflationary pressures in the Philippines, recent tariff cuts on imported rice and other non-monetary measures helped reduce food prices, and should further reduce headline inflation by the year end,” Saxegaard said.

“For this year, our expectation is that for inflation to average 3.3 percent, and for next year, 3 percent. That would be supported by lower food and core inflation remaining well within the target.”

Let me end this post by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines still has momentum to grow better in 2025 than what the IMF predicted?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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NEDA sees faster Philippines GDP growth in the 2nd half of 2024

September 17, 2024September 12, 2024carlocarrasco

Citing some factors, the National Economic and Development Authority (NEDA) sees faster gross domestic product (GDP) growth for the Philippine economy in the 2^nd half of this year which should result in a full 2024 growth rate of 6% to 7%, according to a BusinessWorld new report.

To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…

PHILIPPINE gross domestic product (GDP) growth in the second semester could be faster than the 6% average in the first half amid easing inflation and lower policy rates, the National Economic and Development Authority (NEDA) said.

“Now, with inflation lower, with policy rates lower, with the labor market continuing to be robust, I think we would see an even better second half than in the first half,” NEDA Secretary Arsenio M. Balisacan told BusinessWorld on the sidelines of a Senate hearing on Wednesday.

In the second quarter, GDP expanded by 6.3%, bringing the first-half growth to 6%.

“We are expecting 6-7% (GDP growth) for the full year, and I think that the likelihood that we’ll achieve that is now very high,” Mr. Balisacan said.

However, even as inflation eased to a seven-month low of 3.3% in August, Mr. Balisacan noted that the economy remains sensitive to inflationary pressures.

Year to date, inflation averaged 3.6%, settling within the 2-4% target range of the Bangko Sentral ng Pilipinas (BSP).

The inflation downtrend has allowed the BSP to begin its easing cycle with its first rate cut in nearly four years last August. The Monetary Board lowered the policy rate by 25 basis points (bps) to 6.25% from the over 17-year high of 6.25% previously.

Mr. Balisacan noted the impact of lower policy rates “is not almost instantaneous.”

Despite this, the Philippine and US central banks’ expected easing path should help boost investment activity and support growth, he said.

“Especially now that the expectations everywhere with the Fed expected to decrease (interest rates)… then, there is now greater stimulus for us to continue lowering the policy rates,” he said. “With the business community hearing that, they are likely to rethink their investment plans.”

BSP Governor Eli M. Remolona, Jr. earlier signaled another 25-bp cut in the fourth quarter. The last two Monetary Board meetings for the year are scheduled on Oct. 17 and Dec. 19.

Meanwhile, GDP growth is expected to settle within the government’s target range this year, but may fall short of the growth goals in the next two years, according to the latest forecasts from the BSP’s Policy Analysis Model for the Philippines.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the economy of the Philippines has enough momentum to achieve GDP growth of 7% for 2024?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Philippines achieves 5.7% economic growth in 1st quarter of 2024

May 23, 2024May 9, 2024carlocarrasco

Recently it was confirmed that the economy of the Philippines grew by 5.7% in the first quarter of 2024 which is noticeably lower than what was achieved in the same time period a year ago, according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Philippine economy grew by 5.7 percent in the first quarter of the year, surpassing other major economies in the region.

In a briefing on Thursday, National Statistician Dennis Mapa said the economic growth during the quarter was higher than the 5.5 percent seen in the last quarter of 2023.

Mapa said, however, it was lower than the 6.4 percent economic growth seen in the first quarter of last year.

National Economic and Development Authority (NEDA) Secretary Arsenio Balisacan noted that the Philippine economy continues to demonstrate resilience and growth despite the domestic and external headwinds.

“Despite our challenges on both domestic and international fronts, our economy continues to demonstrate remarkable resilience and growth. This performance retains the country’s position as a leading force among Asia’s emerging economies,” he said.

Balisacan said the first quarter Philippine gross domestic product growth rate is about the same as Vietnam’s, and surpassed other major economies such as China at 5.3 percent, Indonesia at 5.1 percent, and Malaysia at 3.9 percent.

All major economic indicators which include agriculture, forestry, and fishing; industry; and services posted year-on-year growth in the first quarter at 0.4 percent, 5.1 percent, and 6.9 percent.

Household final consumption expenditure and government final consumption expenditure posted lower growth rates at 4.6 percent and 1.7 percent from a year ago’s 6.4 percent and 6.2 percent.

Balisacan said the slowdown in household spending was due to the elevated prices of major food items and the heat wave.

“Meanwhile, government spending also slowed down, primarily due to the sliding of a large amount of expenditure to April this year, whereas the government made such spending in March last year,” he said.

Gross capital formation also posted a lower growth of 1.3 percent from 12.8 percent last year, while imports of goods and services also slowed to 2.3 percent from 4.2 percent.

Growth of exports of goods and services, however, accelerated to 7.5 percent from 1.1 percent in the first quarter of 2023. Balisacan said the growth in exports was mainly driven by the recovery in the exports of electronics products.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the national economy will be able to grow at least 6% in each of the next three quarters? Is it possible that the intense summer heat will make 2nd quarter economic growth smaller?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Economic analysts say that the Philippine economy needs to grow more than 6% per quarter to hit 2024 target

May 23, 2024May 14, 2024carlocarrasco

In light of the recent news that the economy of the Philippines grew by 5.7% during the 1^st quarter of 2024, economic analysts stated that growth should be more than 6% per quarter over the next three quarters in order to meet the set target of the year, according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…

THE PHILIPPINE ECONOMY should expand by more than 6% in the next three quarters to meet the government’s growth target this year, analysts said.

“The Philippines needs to grow almost 6.1% for the remaining three quarters to reach 6% growth for the entire year, which appears to be a tall order, particularly given the slowdown in household spending in quarter one and the subdued global economic backdrop this year,” Makoto Tsuchiya, an economist at Oxford Economics Japan, said in an e-mail.

Philippine gross domestic product (GDP) grew by 5.7% in the first quarter, slightly faster than the 5.5% in the fourth quarter of 2023 but below the government’s 6-7% target.

University of Asia and the Pacific Senior Economist Cid L. Terosa said GDP growth should average 6-6.5% for the rest of the year to hit the lower end of the government’s target band.

“We had always been expecting growth to stay subdued largely due to the ‘triple threat’ faced by the economy. Elevated inflation, high borrowing costs and fiscal consolidation are the troika of challenges we face,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.

Household spending, which accounts for nearly three-fourths of economic output, rose by 4.6% in the January-to-March, the slowest since the coronavirus pandemic and weaker than 5.3% in the fourth quarter and 6.4% a year ago.

Mr. Tsuchiya said private consumption lagged due to “economic-wide” pressures on spending in the first three months of the year.

“We believe the softening in household consumption was due to a combination of elevated inflation, tepid confidence and the impact of monetary tightening,” Mr. Tsuchiya said.

Inflation quickened to 3.8% in April amid rising food and transport costs. April was the third straight month that inflation accelerated.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that inflation will continue to rise and prevent the Philippines from achieving economic growth of 6% for 2024?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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